- (1.) S. L. SARAF, J. The revisionist is a public limited company and is carrying on the business of manufacturing of rectified and denatured spirit under the United Provinces Sales of Motor Spirit, Diesel Oil and Alcohol Taxation Act, 1939. The levy of tax on the alcohol as defined under the said Act is on the first purchaser and there is no tax leviable under the said Act of 1939 on the manufacturer of denatured and rectified spirit. As such no taxable liability arises on the manufacturer of denatured and rectified spirit under the U. P. Trade Tax Act, 1948. Prior to the amendment made in 1995, there was no provision whereby any tax to be imposed on the denatured and rectified spirit. It is also urged before this Court that no Central sales tax is leviable in view of section 3 (1) (c) of the Act which reads as follows : " There shall be levied at the point of first purchase of alcohol in the State a tax at the rate of 40 paise per litre for the first million litres and at the rate of 20 paise per litre for the remainder payable by the purchaser and such tax shall be collected and paid in the prescribed manner to the State Government. "
(2.) THE aforesaid provision of the Act shows that the imposition of the tax is only on the dealer and not on the manufacturer of denatured and rectified spirit. THE aforesaid view has been reiterated by this Court in two other decisions reported in [1987] 66 STC 264; 1987 UPTC 1034 (Oudh Sugar Mills Ltd. v. Commissioner of Sales Tax) as well as 1997 UPTC 173 (Commissioner of Sales Tax, Lucknow v. Awadh Sugar Mills, Sitapur ). On consideration of the aforesaid decisions I have no manner of doubt that no tax is leviable or duty is leviable on the denatured and rectified spirit sold by the manufacturers. It can be levied on the first purchaser who does not manufacture the product. The certain amendments have been made in section 3-A of the U. P. Trade Tax Act which reads as follows : " On the turnover in respect of declared goods, at the point of sale to the consumer at the maximum rate for the time being specified in section 15 of the Central Sales Tax Act, 1956 or where the State Government, by notification, declares any other single point or a lesser rate, at such other point or at such lesser rate. " In view of the aforesaid amendment, it is being argued that even in case of manufacture, tax can be levied at the rate and point as may be prescribed by the State Government.
(3.) IT is urged by the learned Standing Counsel Sri. K. M. Sahai, appearing for the State Government that in view of the aforesaid amendment, tax can be imposed on the alcohol including denatured and rectified spirit. However, my attention has been drawn by Sri Bharatji Agrawal, appearing for the revisionist to the provisions of section 3-A of the Act whereby it is made clear that the said provision will come into effect only when the State Government issues notification and declares the point and rate of the tax leviable on the said items. It was further urged by Sri Bharatji Agrawal that neither point nor rate has been declared by notification so far except to the extent notification issued on April 1, 1996 whereby alcohol as defined in the United Provisions Sales of Motor Spirit, Diesel Oil and Alcohol Taxation Act, 1939 has been excluded. It is also submitted by the learned counsel for the revisionist that on the basis of the said notification manufacturers of denatured and rectified spirit are not liable to pay tax under the provisions of section 8 (2a) of the Central Sales Tax Act.;